CSEC,China Shenhua(SH:601088) Shenwan Hongyuan Securities·2025-08-29 08:45Group 1: Market Overview - The dividend assets are rapidly shrinking under the pressure of falling dividend yields and rising risk-free interest rates, raising questions about their allocation value and potential for absolute returns[3] - As of Q2 2025, the dividend yield of the CSI 300 index has decreased to 85 basis points above the 10-year government bond yield, indicating continued allocation value despite significant micro-level differentiation[3][26] - New insurance premium income reached CNY 3.73 trillion in H1 2025, a year-on-year increase of 5.3%, suggesting that insurance will remain a key channel for household asset allocation[3][9] Group 2: Investment Focus - In the A-share market, focus on cyclical and consumer sectors, with opportunities in coal, oil and gas, and consumer goods like liquor and air conditioning, which show stable performance and increased dividend ratios[3][47] - In the Hong Kong market, the dividend gap has narrowed, with the A-share dividend premium decreasing from 47.4% at the beginning of the year to 33.5% by August 26, 2025, indicating that Hong Kong dividend stocks remain 6-7% cheaper[3][34] - The insurance sector's equity holdings have steadily increased, reaching 21.4% of total insurance fund utilization, with a projected incremental investment of CNY 668.76 billion under a neutral scenario for 2025[6][8][20] Group 3: Risk Factors and Recommendations - Risks include rising risk-free interest rates and increased volatility, which could impact individual stock performance[3] - The report recommends a dual strategy for the second half of 2025: seek cyclical assets with potential for recovery and explore undervalued dividend opportunities in the Hong Kong market[3][47] - The report updates the A-share and Hong Kong dividend stock pools, emphasizing stocks with a dividend yield threshold of 4% and stable profitability[48]